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You and YOUR money

Make the right choices with your money and do not stand for poor service, there are plenty of options out there for savvy savers.

The recent images of a waterlogged United Kingdom will impact on thinking, planning and development for years and generations to come.

Such disasters bring out the best and worst in the British character – along with, eventually, the politicians. “Wallies in Wellies” was one headline.

No-one in Cornwall and the South West was surprised that it was only when the water started lapping over the doorsteps of the Home Counties that the politicians sprang into action. Prime Minister David Cameron promised financial aid of a “whatever it takes – money no object” level.

The cost will be huge. Insurance premiums will rise. We will all pay the bill, just as it should be. Years of neglect and inertia will disappear, as will building houses on floodplains. Things will change – things will have to change. There’s a General Election next year – politicians want your vote. Previous promises are fading – Cameron’s future depends on how he copes with this water torture!

Sadly, the millions poured into saving the UK from the weather is but a drop in the ocean to the billions that have been poured into saving our banks!

Sadly, despite such generosity, there is no sign that the banks have seen the error of their ways with our money. Six years on, we still have almost-weekly massive miss-selling scandals and fines, the bonus culture is still thriving – and the banks are still telling us how to spend our money, always allowing they consider us fit enough to handle it in the first place!

This week Barclays increased its bonus pool for top executives to £2.38billion – as well as cutting 12,000 jobs, 7,000 in the UK. Some cynics think that’s one way of balancing the books!

We can continue to blame and bad mouth the banks and the bankers. But, by now, it should be crystal clear they will only change if forced to; if we, the customers, take action.

So, consult you financial adviser. Their experience in the market place is invaluable. Make a change; it’s difficult to believe the new banks springing up can be any worse than the old ones!

Last month the BBC’s Money Box highlighted HSBC’s heavy-handed approach to customers asking to withdraw their own money. Most of us would be slightly bemused to be asked by the bank cashier to explain what the money was for – and absolutely stunned to be denied access to OUR cash if we don’t reply in what they consider is a satisfactory fashion!

Stephen Cotton, from Worcestershire, attempted to withdraw £7,000 from his local HSBC branch from his instant access savings account to repay a loan from his mother. He’d withdrawn a larger amount from the same branch the year before.

His request was declined. The bank wanted a satisfactory explanation of what the money was for. His verbal indication was not enough. They wanted a letter from his mother. Mr Cotton asked how much he could take out without an explanation. Staff refused to tell him. By a trial and error process, he found out that £5,000 was too much, so was £4,000 – but £3,000 was ok! Mr Cotton was also told he could not return the same day to withdraw another £3,000.

Incredibly, when Mr Cotton wrote to HSBC to complain about these new rules, which he had not been informed about, the bank stayed on the front foot: “As this was a not change to the Terms and Conditions of your bank account, we had no need to pre-notify customers of the change.”

It seemed a fairy fundamental change to the terms and conditions to most people. And certainly to Mr Cotton: “I’ve been banking in that bank for 28 years. They all know me in there. You shouldn’t have to explain to your bank why you want that money. It’s not theirs, it’s yours.”

Another HSBC customer was asked for booking receipts when taking out cash for a holiday.

Once Money Box got on the case, HSBC’s bold stance evaporated and the bank started back pedalling, admitting, following customer feedback, it was changing its policy. “Failure to show evidence is not a reason to refuse a withdrawal.”

Other banks said they reserved the right to ask questions about large cash withdrawals, but none of them said they required evidence of what the money was being used for before paying out.

Douglas Carswell, Clacton’s Tory MP, summed it up: “All these regulations which have been imposed on banks allow enormous interpretation. Basically, it infantilises the customer. In a sense, your money become pocket money and the bank become your parent.”

We all get frustrated walking into the local branch of OUR bank, dealing with a cashier we’ve know for years and still being asked for ID – passport or driving licence. The cashier smiles back and trots out: “verification of identity, data protection or customer protection” as supposedly acceptable justification for not believing the evidence of their own eyes!

Is there any value to being loyal to you bank? It’s a question that you should regularly ask yourself and your financial adviser. If the answer is “NO” – then it’s time to take action - move, or get a better deal with your current bank.

The solution is in your hands; so don’t complain if you sit back and take it!

Banks claim they wish to establish a better relationship with their customers; they certainly want to know a lot more about what we’re doing and our financial situation. Customers want service, proper service, individual service, and service that reflects their financial position, as well as a proper relationship.

It would appear the new banks are much more receptive to customer’s needs than those long established in the high street. There are exceptions, of course.

Icelandic Banks maybe have been a major casualty of the 2008 banking crisis, but Sweden’s Handelsbanken, founded in Stockholm in 1871, has flourished in the UK during the recession by providing a personal service, expanding where and when needed.

Its success can be gauged by the fact there are now over 150 branches in the UK from three in 1999 – and that its customer satisfaction and loyalty show levels over 80%, well clear of the Britain’s high-street operations.

Customers of a certain age are becoming increasing asset-rich and cash poor – and the UK’s main banks are doing little, if anything, to ease this situation. With those of state pensionable age predicted to rise by almost a third in the next 25 years, this is a problem that is not going to go away.

There is a great opportunity for financial institutions to grab a share of this attractive business, with risk reduced, security enhanced and grateful customers. There is a great opportunity for the customer to find a financial haven that respects and treats them fairly, and satisfies their financial needs.

This article was written by Worldwide Financial Planning, for more information about their services visit www.wwfp.net.